Technology entrepreneur
San Francisco, California Convinced that college is overpriced and overvalued, a Silicon Valley investor is backing a new breed of young dropouts.

When Timothy Leary, the 1960s psychedelic guru, advised devotees to “Turn on, tune in, drop out,” he wasn’t referring specifically to college—though maybe he should have been. By the 1990s, Leary’s hippie followers had been sucked, like everyone else, into the prime obsession of the middle class: getting one’s children into a good college.

Now along comes a very different guru with a similar-sounding message. Last fall, Peter Thiel, the Bay Area billionaire who helped start PayPal and Facebook, announced that in addition to supporting various libertarian and futurist causes such as “seasteading” and space exploration, he would also offer about two dozen aspiring entrepreneurs $100,000 apiece, over two years, to skip college and try to start a business. “I think it’s best for people to actually try to think about the future and not default to education,” he has said.

Shamus Khan, a Columbia University sociologist who studies wealth and inequality, called the Thiel Fellowship “an act of total self-indulgence” that perpetuates the inequality that Silicon Valley has helped create. And Slate’s Jacob Weisberg, who has a long-standing antipathy to libertarians, wrote that the concept threatens to divert “a generation of young people from the love of knowledge for its own sake and respect for middle-class values.”

If we all went to college for the sheer joy of reading Proust, that would be nice; but most parents wouldn’t pay $100,000 just to have a school instill respect for middle-class values; that’s what parents are supposed to do. Parents send their kids to college because they know that people who have college diplomas earn a lot more money than people who don’t (about 71 percent more, annually, than the average high-school graduate, according to the latest census data).

But it’s not always clear what employers are getting in return for paying so much. Evidence indicates that educational credentials don’t signal what you’ve learned so much as the fact that you’re the sort of person who got admitted to a big-name school. When I showed up for business-school orientation at the University of Chicago, a woman in the career-services office said, “We could stick you guys on a cruise ship for two years, and you’d be fine.”

At least the credentials used to be cheap. Since 1982, while the Consumer Price Index has more than doubled, the cost of higher education has risen more than fourfold. Partly because of this price increase, the meritocratic system is hardening into yet another vehicle for entrenching privilege: a way for the educated elite to ensure that their children maintain the same status. The less fortunate graduate has tens of thousands in student loans, which can keep her from buying a home or starting a family—or, as Thiel has pointed out, from taking a risk on a new business idea. Student-loan debt is “actually worse than a bad mortgage,” he has said. “You have to get rid of the future you wanted, to pay off all the debt from the fancy school that was supposed to give you that future.”

Critics point out that with more than 400 applicants for 24 slots, Thiel’s program is more selective than Harvard. These are people who—like Chicago M.B.A.s—would undoubtedly have been fine no matter what they spent the next four years doing. But what about everyone else? What if Thiel’s example encourages people to drop out, and they ruin their lives?

This hardly seems likely. Short of fatal accidents, it’s hard to ruin the life of an 18-year-old; if dropping out doesn’t help him tune in or turn on, he can always go back to school. And if he decides that school isn’t for him, he will still have one advantage over many of his fellow workers: he won’t be saddled with crippling debt.